Buying a house making the right decisions every step of the way
Buying a house is easily the biggest decision one will ever make in life. Chances are that it will only be made once, and this raises the stakes even higher. Many people along the home buying process will likely be more experienced and have handled cases at least more than once. There is always a danger that one’s ignorance can get them in trouble. So here are some of the careful steps one should follow, questions to ask and factors to consider for the first time home buyer.
There is a commonly held misconception that paying rent is throwing money away, and this pushes people to want to have a house as soon as possible. The truth is this is not necessarily always true. Buying a house too soon can be an even bigger mistake than remaining a renter. When looked at critically, the first few years of a mortgage settlement is essentially equivalent to renting. However, buying a house and having to move a few years later makes reselling an expensive process, typically taking between 5 and 10 percent off the value of the house. It is advisable to only buy a house if one will stay there for the next five years or longer. If there is a possibility of moving, then do not buy.
Do not rush into the house buying process once the time is right. Regrettable real estate deals almost always come as a result of time pressure. Most of the time, one ends up paying for residential properties they would have found on the cheap without the added time pressure. This is especially important when moving to a new city. Rent out a place for a few months while surveying the region and searching for a permanent home. When the decision is finally made, it should not be rushed.
In reality, buying a house without involving a realtor is easier. For first time buyer, though, it makes more sense involving a professional instead. Many people turn to friends, family, online directories or workmates for recommendations. Regardless of how they are chosen, the best sign of a good realtor, or any service provider for that matter, is how satisfied their clients were with their services. Remember, realtors are not necessarily working in the best interest of the buyer, strictly speaking. While everyone wants the best house at the lowest possible price, agents make more money if they close the deal quickly and sell the house at a higher price. Do not let this result in situation where the realtor rushes a decision. In reality, this conflict does not really matter, but when one finds a realtor with a solid reputation, chances are that they will get a good deal.
Other important tips include setting a strict budget and following through. One might also consider hiring their own inspector to avoid conflict of interest situations. First time buyers might feel a lot of pressure with the decision, but with these tips, the process will definitely be much smoother.
3 steps to be followed while buying a home:
- Start researching first :
Start reading newspaper, magazine that has real estate listings as soon as you can. Make a note of homes you are interested and how long they stand on the market. Also note down the change in prices.
- Determine how much you can afford :
Lenders generally recommend that people look for homes that cost no more than 5 times their household income. But you should make this determination on the basis of your financial situation.
- Find the Right Real Estate Agent :
A real Estate agent plays a vital role in buying and selling a home. Real Estate agents can provide you with helpful information on homes, neighborhoods, buying process and familiarity with the area. The best thing is it doesn’t cost you anything to use an agent, since they are compensated from seller of the house.